In This Article:
-
Core Net Investment Income: $0.18 per share.
-
Total Distributions: $0.24 per share.
-
Undistributed Spillover Income: $58 million or $0.88 per share.
-
Portfolio Total: $1.2 billion as of March 31.
-
Investments During the Quarter: $177 million in three new and 52 existing portfolio companies.
-
Weighted Average Yield on New Investments: 10.7%.
-
PSLF Joint Venture Portfolio: $1.4 billion as of March 31.
-
Weighted Average Yield on JV Investments: 10.1%.
-
Average NII Return on JV Capital: 18.3% over the last 12 months.
-
GAAP and Adjusted NAV: $7.48 per share, down 1.2% from the prior quarter.
-
Debt-to-Equity Ratio: 1.28 times as of March 31.
-
Weighted Average Yield on Debt Investments: 12%.
-
Nonaccruals: 1.6% of the portfolio at cost and 0.4% at market value as of March 31.
-
Debt to EBITDA Ratio: 4.7 times.
-
Interest Coverage Ratio: 2.1 times.
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Pennant Park Investment Corp (NYSE:PNNT) reported a solid quarter despite market volatility, with strong support for existing portfolio companies and private equity borrowers.
-
Approximately 80% of originations came from existing borrowers, showcasing the strength of long-standing relationships and origination capabilities.
-
The company has reduced leverage and strengthened its balance sheet, positioning it to take advantage of current market opportunities.
-
The portfolio's weighted average debt to EBITDA was 3.9 times, with a yield to maturity of 11.6%, indicating strong credit statistics.
-
PNNT's joint venture portfolio continues to grow, contributing significantly to core net investment income with a 18.3% average NII return on invested capital over the last 12 months.
Negative Points
-
Core net investment income was $0.18 per share, which is below the total distributions of $0.24 per share, indicating a shortfall.
-
The current market environment has delayed the company's plan to rotate out of larger equity positions into interest-paying debt investments.
-
Net realized and unrealized change on investments and debt resulted in a loss of $2 million for the quarter.
-
The company's GAAP and adjusted NAV decreased by 1.2% from the prior quarter.
-
There are three nonaccruals in the portfolio, representing 1.6% of the portfolio at cost, although this has been slightly reduced post-quarter.
Q & A Highlights
Q: How would you characterize the current pipeline for new investments? Did any deals from last quarter's pipeline get scrapped or delayed? A: Arthur Penn, CEO: Some M&A deals were delayed due to tariffs, but activity has picked up recently. We expect M&A flows to improve as market uncertainty decreases. Currently, 80% of our investments are with existing portfolio companies, and we're seeing new platforms emerge as conditions stabilize.